UK employer guide

How holiday pay costs add up

Holiday pay is part of the real cost of hourly and casual staff, even when the worker is not on the clock.

In short

When you budget for hourly staff, you need to reserve money for the paid holiday weeks they are entitled to take. That reserve is often forgotten until payroll time.

Why holiday pay matters

If someone works 46.4 weeks a year but is entitled to 5.6 weeks of paid holiday, the employer still needs to fund those extra paid weeks. That is why the annual gross cost is higher than working weeks alone.

What the calculator is doing

The calculator multiplies the hourly rate by the working hours, then adds a holiday reserve based on the paid holiday weeks entered. That gives a simpler budget estimate for casual or hourly staff.

What it does not include

It does not add employer National Insurance, pension contributions, agency fees or payroll overheads. Those can be layered on separately if you need a fuller headcount budget.

For general UK holiday entitlement guidance, see GOV.UK's holiday entitlement rights page. Use the holiday pay cost calculator for a quick estimate.